5 Reasons You Need Life Insurance for Your Family

Did you know that more than 23,600 parents with children below 18 years pass away annually in the UK? These are pretty daunting statistics. A great way to stay prepared for such eventualities is by taking out life insurance.

In this article, we explain five key reasons you need to acquire this coverage for the sake of your family.

Maintain the family lifestyle

Assuming you’re your family’s sole breadwinner, chances are your partner, children, aging parents, and maybe even other relatives rely on you. If you were to pass away today, your death would impact the quality of their lifestyle significantly.

This is where having a life policy comes to aid.

Your coverage's monetary support can help them take care of everyday needs such as food, rent, and childcare.

Enjoy more peace of mind

The uncertainty that comes with death may disrupt your decision-making and steal away the joy of living. These worries tend to grow bigger when you have a family and are not sure how they would survive if you passed away.

The good news is that you can enjoy more peace of mind by taking out life insurance.

For example, having a term life policy means your family remains covered for a fixed duration. If you were to pass away during that contract period, your insurer would pay out the agreed benefits in a lump sum.

Another excellent policy that could be of great benefit to your loved ones is the family income benefit. It offers an assurance that your family will continue receiving monthly payments after you are gone. This gives them the much-needed confidence that they have a source of livelihood even in your absence as their breadwinner.

Clear your debts

The Statista Research Department report of November 2020 states that there has been an uptrend in the UK's household debt since 2009. The most common liabilities and loans include student loans, credit cards, mortgages, automobile financing, and personal loans.

If you are worried that loans could cripple your family if you pass away, then a life policy is highly recommended. An excellent place to start is to take out Whole of Life insurance, a policy that guarantees a payout as long as you consistently pay your premiums. The insurer pays out the lump sum to your family when you pass away.

This payment can help prevent debts such as a mortgage and car loans or even take care of your funeral and burial costs.

A framework for your family’s financial security

Life insurance helps to facilitate continued family prosperity in three main ways. For starters, your family can start and run a business using the proceeds of your life policy. The insurer provider sends a lump sum amount or regular payouts to your family, which your family can use to finance the business.

Alternatively, your family can use the benefits to take care of education costs. For example, if your children are in university, the money could help them complete their studies and enable them to become employable.

Clearing student loans is another decision your family could take to help avoid huge withdrawals from family accounts. It’s also a great way to provide your children with a quick path to clearing loans before entering a salaried job.

Finally, the proceeds from your insurance policy can serve as an inheritance for your loved ones. It’s every parent’s dream to leave a lasting legacy to their children. Only a few can be as sentimental as an inheritance in the form of life insurance benefits.

Achieve long-term goals

Your family can use the life insurance benefits to buy a home or finance an existing mortgage. An excellent policy for this is the decreasing life policy specially designed for liabilities such as mortgages.

As the name implies, its benefits decrease with every passing year, but that also means it’s cheaper than most other life policies. Should you pass away during the contract period, your insurer pays out a lump sum amount that your family can use to clear any remaining mortgage costs.

Conclusion

As Tiago Melo put it, “Life insurance is the greatest proof of love that we can leave our loved ones.” This cover enables your family and dependents to maintain a good lifestyle, clear debts, enjoy more peace of mind, and protect their home and other valued assets. The earlier you take it out, the better it is for you and your family.

Do you have a life insurance policy?